China Copper Inventories Saw Five Consecutive Weeks of Destocking, the Most-Traded BC Copper Futures Contract Closed Up 1.37% [SMM BC Copper Review]

Today, the most-traded BC copper 2605 contract opened at 88,200 yuan/mt, touched a high of 88,630 yuan/mt, and then copper prices' center kept declining. At the start of the daytime session, it touched a low of 87,410 yuan/mt, and after the afternoon session opened, the center rose, ultimately closing at 88,510 yuan/mt, up 1.37%. Open interest stood at 6,515 lots, down 33 lots from the previous trading day, and trading volume reached 3,879 lots, up 985 lots from the previous trading day. On the macro front, Trump announced a blockade of the Strait of Hormuz, interception of oil revenues linked to Iran, and threatened to clear Iranian mines; Iran allowed non-military vessels to pass but rejected three major US demands including "equal sharing of strait interests." Diplomatic channels between the two sides have not yet been closed. The Middle East situation continued to evolve, and market reactions to geopolitical tensions turned mediocre. Fundamentals side, supply side, arrivals of domestic sources decreased somewhat, while imported sources maintained stable arrivals, and the supply landscape tightened somewhat. Demand side, downstream buyers still primarily made just-in-time procurement, and overall consumption slowed down slightly compared with the previous period. As of Monday, April 13, SMM copper inventories in mainstream regions nationwide decreased 12.52% WoW from the previous Monday, marking five consecutive weeks of destocking, providing momentum for copper prices to rise.

The SHFE copper 2605 contract closed at 99,610 yuan/mt. Based on the BC copper 2605 contract price of 88,510 yuan/mt, its after-tax price was 100,016 yuan/mt. The price spread between the SHFE copper 2605 contract and BC copper was -406 yuan/mt, showing an inversion that widened from the previous day.